Book review: Will the “rise of the robots” kill human jobs?

Historically, business leaders and technologists have portrayed new technology as a way to boost labor productivity, exports, and society’s wealth. This has long been considered part of the inevitable and necessary “creative destruction” of capitalist production that, while disruptive in the short term, is beneficial over time. Anyone who opposes this mantra is portrayed as a hopeless Luddite.

But over the last couple of decades, the economy has been restructured so that the wealth gains from higher productivity and new technology have flowed into the pockets of an ever smaller minority of 1-percenters. Now, the “rise of the robots” threatens to exacerbate these trends to an alarming degree never before imagined. However, the “robots” in question are not simply the assembly-line robots of Japanese automakers, but include so-called “smart” machines, artificial intelligence, software automation, networked communication, big data, and faster computer processing that are slowly being injected into just about everything at home or the office.

It has generally been assumed that automation is primarily a threat to workers who have little education and lower skill levels. But as software automation and sophisticated algorithms advance rapidly in capability, experts now predict that many college-educated, white-collar workers are going to discover that their jobs are also going to be “robotized” as computers take on jobs and tasks with significant intellectual content.

By all accounts, this “robotizing” of the economy is proceeding at a galloping pace. An Oxford University study of over 700 occupations estimates that 47 percent of existing U.S. jobs are at risk from computerization; that’s over 60 million jobs threatened by “technological unemployment.” As machines increasingly take on routine, predictable tasks in virtually every industry and employment sector, human jobs will inevitably decline and workers will face an unprecedented challenge as they try to adapt. What will be the impact of these technologies on individual workers, on the quality of jobs, on the labor force, and on the economy as a whole? Will the robots replace the humans?

Recently, a flurry of best-selling “technology books” have plumbed these issues and their consequences. These books have been snapped up by a public charmed by the crystal ball aspects of predicting the future. The most successful and highly cited of these, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (W.W. Norton, 2014) by Erik Brynjolfsson and Andrew McAfee, has become the standard since its publication in 2014. It is a riveting account of how “smart” machines, robotics, automation, faster computer processing, and artificial intelligence will shape our collective future. The strength of the authors’ book is how it weaves an intriguing macro- and microeconomics vision, especially as they assert that the global economy is on the cusp of a dramatic growth spurt driven by the combination and recombination of these powerful technologies.

While the authors look critically at some of the broader economic implications of this Machine Age world, mostly their book maintains a posture of wide-eyed boosterism. It shies away from addressing many long-term consequences and challenges, particularly for the labor market and people’s jobs. For example, Kodak, which at one time ruled the world of photography and film, and at its peak employed 145,000 in mostly middle-class jobs, recently declared bankruptcy. Kodak has been replaced by Facebook, or rather by the recent Facebook acquisition Instagram, the Kodak of the digital age. Facebook employs a mere 8,000 people — where are the other 137,000 former Kodak employees supposed to find jobs?

Brynjolfsson and McAfee maintain that as the robots and smart machines take over certain occupations, these technologies will allow a shift in demand to other kinds of work, so in the longer term most displaced workers will find new work and the impact will be positive. That has been the impact of technology in the past, they reason, and it will be again. But their arguments are unconvincing, and rely more on wishful conjecture than hardheaded analysis. A lot is at stake for American workers, and Brynjolfsson and McAfee’s book, as well as most others of this genre, don’t really address the brave new world of this central dilemma, which can be illustrated by a simple thought experiment: What if the smart machines and robots could perform every single job there is to do, so that no human had to work anymore? Who would reap the benefit of this huge productivity increase? Would it be a handful of “Masters of the Universe,” i.e. the chief entrepreneurs and investors? Or would the gains be distributed to the general public?

Their book would have benefited greatly if they had taken the time to more thoroughly analyze the ongoing transition from the New Deal society to what I call a “freelance society.” Millions of American workers are losing the “good” jobs that provided a measure of job security, decent wages, and a safety net, and are becoming freelancers and independent contractors. Best estimates say that by 2020 – a mere five years away — a majority of the 130 million employed Americans– approximately 60-70 million workers – will be “independent workers,” tantamount to being freelancers and day laborers during at least part of their work week. Even many full-time and professional jobs will experience this precarious shift. Yet The Second Machine Age never really delves into the onset of this freelance society and its chilling consequences.

Another bestseller of this genre is Who Owns the Future? (Simon & Schuster) by Jaron Lanier. Lanier is a longtime Silicon Valley insider, and his provocative book reads like a somewhat meandering private conversation between him and his insider friends. Lanier takes some of his colleagues to task, especially those techie utopians who obsess over a sci-fi movie-type future steeped in a post-Singularity matrix (the hypothetical imminent merger of human biology and technology), as well as those seeking “methusalization” (i.e., immortality), and other fantastic futurist scenarios. Nevertheless, the book does attempt to look more deeply into the impacts that digital technologies and the Internet will have on jobs, the middle class, and inequality. Lanier suggests that it could very well result in widespread unemployment and be a threat to the middle class and to the broader economy (Lanier also touched on some of these issues in his previous book, You Are Not a Gadget, Alfred A. Knopf, 2010). But Lanier’s proposed solution is to make corporations like Google, Facebook and others pay consumers for any personal data they collect, providing a revenue source to average people. While that is an interesting idea with merit, it really does not go to the core of the challenges that our democratic society faces, in which the overwhelming economics are subsuming our politics and directly threatening the middle-class society and social contract.

Indeed, Lanier’s frame as a Silicon Valley insider is ultimately disappointing since he seems to accept that there is little that public policy can do, and so jobs are going to disappear, and it’s a matter of figuring out how to squeeze some lemonade from the lemons. Still, Lanier’s cautionary note in Who Owns the Future? provides a valuable counterpoint to all the starry-eyed tech boosters, even while it lacks in important detail or an understanding of what solutions are necessary to alter the course of these developments.

The New Digital Age: Transforming Nations, Businesses, and Our Lives (Knopf) by former Google CEO Eric Schmidt and Jared Cohen, published after Lanier’s book, took issue with some of Lanier’s cautionary tone, specifically concerning the impact on the middle class and employment. Schmidt acknowledges that inequality is growing and calls it the “number one issue” for democracies. He also admits that technological change is the most important driver of this explosion in inequality. Yet where Lanier saw the glass partially empty, Schmidt sees it more full.

For example, Schmidt says that self-driving vehicles will ease the strain on Teamster drivers, while Lanier writes of “Napstering the Teamsters” out of work, and of how such technology could go horribly wrong. Their two books also disagree on whether various occupations will be enhanced or diminished by robotics. A radiologist, for example, is likely to become obsolete since computers are rapidly getting better at analyzing images. Forbes magazine currently uses the services of a company called Narrative Science that “employs” computers to generate news stories containing financial data and other content without the need for human journalists. Other publications have begun doing this for sports reporting, using computers that are capable of taking a pile of statistics and cranking out a news story. Jobs for other skilled professionals, including lawyers, scientists and pharmacists, already are being filled by advancing information technology.

Schmidt’s solutions to the challenges he identifies are limited in their ambition and scope. Like President Barack Obama, he has pushed for more education in science, technology, engineering, and math (STEM) to prepare the workforce for the future. But he predicts that many jobs ultimately will be eliminated by robots that increasingly can automate practically any repetitive task, and at the same time that there are upper limits to the number of people who can hold advanced STEM jobs.

What about those who lose out in this winner-take-all society?, Schmidt looks to the government to ameliorate their situation, arguing that society needs a “safety net” for those who lose their jobs so they can “at least live somewhere and have health care.” While his compassion is noteworthy, even Schmidt’s fundamental optimism paints a rather dismal picture for society’s castaways, who for one reason or another will face a meager life on government assistance. But they are a mere boulder in the road of the Indy 500-speed bulldozer, with Schmidt predicting that change is coming and “the longer-term solution is to recognize that you can’t hold back technology progress.”

Despite that troubling reality, Rifkin remains fairly upbeat about the future, and he portrays a “Collaborative Commons” – which shares a great deal with what has been called the “sharing economy” – as the reason why. He says “hundreds of millions of people are already transferring parts of their economic lives to the global Collaborative Commons…making and sharing their own information, entertainment, green energy…They are also sharing cars, homes, clothes and other items via social media sites, rentals, redistribution clubs, and cooperatives at low or near zero marginal cost.” We are, says Rifkin, entering an increasingly interdependent world beyond markets.

Unfortunately, Rifkin never really grapples with the political ramifications of who exactly will control this “collaborative commons.” He seems to assume that these trends have a power and momentum all their own that will iron out any inequalities. That kind of optimism is classic Rifkin-ism, but I think it’s hopelessly naïve. Without a clear blueprint of what kind of public policy needs to be legislated in the near future, instead of in the distant future in which Rifkin often specializes, there’s little reason to hope that these trends will translate automatically into a bright future for the middle class. While Rifkin’s book is one of the few to really think out loud about the new economy and its consequences, ultimately he is blinded by a dead-end optimism that is misplaced as long as certain policy changes are not enacted that are capable of solidifying the wobbly ground beneath American workers.

The clear lesson of our recent economic history is that the general public is not certain to benefit from technological innovation or increases in labor productivity. As robotics and automation become more comprehensive and integrated into the economy, it’s very possible that the built-in inequalities of the U.S. political economy will render these technologies into ones that threaten the future of workers by reducing the number of human-occupied jobs, and further increasing inequality.

And that poses additional dilemmas because robots and machines don’t spend money, and they don’t add to consumer demand. So the decline in the number of human jobs would inevitably lead to a decline in aggregate consumer demand and spending, which in turn would reduce the capacity to buy up the goods and services produced by the economy, and would therefore unleash chronic recessionary pressures, precipitating a further loss of jobs for humans (what technologist Martin Ford has called “technological unemployment”).

It seems certain that the battles over who gets to control the benefits of these technologies is going to increase in intensity. If the “rise of the robots” is not accompanied by an adequate policy response, pursued during this interregnum before our society begins edging closer to that machine-age moment, then most human workers will end up being squeezed from multiple sides. The onset of that brave new world is coming sooner than the general public or policymakers realize. Are we ready? Judging by the shortcomings and omissions contained in these four leading technology books, the answer is “definitely not.”

A provocative, remedy-based perspective on the joint complexities of economic stability and ever expanding technology.–Kirkus Reviews

“Hill hits Silicon Valley darlings like Uber and Airbnb alongside the former online black market Silk Road, right-to-work laws, and factory robots all under the umbrella of “naked capitalism.” He explains how the rise of the “1099 workforce” is not limited to Silicon Valley; more and more traditional jobs in fields like manufacturing are turning to contractors to perform the same tasks full-time employees used to do. In addition to costing workers in benefits and safety nets, misclassifying workers as contractors costs federal and state governments billions of dollars annually in lost tax revenue.” ―Washington Monthly

“For anyone driven crazy by the faux warm and fuzzy PR of the so-called sharing economy Steven Hill’s Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers should be required reading… Hill is an extremely well-informed skeptic who presents a satisfyingly blistering critique of high tech’s disingenuous equating of sharing with profiteering…Hill includes two chapters listing potential solutions for the crises facing U.S. workers…Hill stresses the need for movement organizing to create a safety net strong enough to save the millions of workers currently being shafted in venture capital’s brave new world.” ―Counterpunch

“A growing underclass scrambling to make ends meet at the whim of increasingly picky and erratic employers, that number could balloon to 65 million within 10 years, or about half of the domestic workforce, warns Steven Hill in his troubling new book, Raw Deal. This brand of worker abuse cuts across industries and company size. Hill calls out Uber, AirBnb, Merck, Nissan, and dozens of others. Hill does a nice job of putting it in starker, easier-to-understand ways.” ―Washington Independent Review of Books

“Steven Hill’s book Raw Deal is a red-faced, steam-out-the-ears indictment of sharing apps. Yet Hill offers a pragmatic, almost post-ideological solution: “individual security accounts” for workers. Companies that use independent contractors, or offer scant benefits for employees, would have to add on a certain percentage of their pay as a contribution to those accounts, which would cover health care, unemployment insurance, and more. There’d be a mechanism ― and a requirement ― for companies to contribute to the long-term well-being even of workers who aren’t on their traditional payrolls.” ―Boston Globe

“Raw Deal is a book for its time. Steven Hill perfectly captures the anxiety of the American worker in today’s increasingly digital economy. Hill presents some compelling ideas, the most important being something he calls the Economic Singularity. In this unfortunate tipping point, the concentration of wealth in the hands of the few results in economic implosion because the 99 percent can’t afford to buy anything the 1 percent has to sell. The United States is turning into a nation of 1099 workers who eke out a living driving cars, renting rooms and running errands for people who apparently have better things to do with their time. Throw in self-thinking computers and obedient robots, and there won’t be any work left for plain old Homo sapiens…Hill proposes that we offer 1099 workers a new safety net consisting of tax deductions, individual security accounts and multiemployer health care plans. All good ideas.” ― San Francisco Chronicle

This book is a must read for those concerned about how technology is disrupting the way we work and eroding the social safety net, and how policy makers should respond to ensure that the growing number of workers in the “gig” economy earn adequate benefits.—Laura D’Andrea Tyson, UC-Berkeley and former Chair of the US President’s Council of Economic Advisers

“Steven Hill’s groundbreaking book on the part-time, unstable ‘Uber Economy’ shows how a new sub-economy becomes a work of law-flouting regress undermining full-time work. Remote corporate algorithms run riot!”— Ralph Nader, consumer advocate

For many years, Steven Hill’s analysis, commentary and activism have helped shape our understanding of the U.S. political economy. His latest book, Raw Deal is A riveting expose that shows with alarming lucidity what Americans stand to lose if we don’t figure out how to rein in the technological giants that are threatening the American Dream.–Katrina vanden Heuvel, editor and publisher of The Nation

In Raw Deal, Steven Hill documents in frightening detail the ways in which new forms of work promise to plunge US workers and their families into further economic hardship, risk-assumption, and instability. Fortunately, Hill does not simply anticipate catastrophe; he closes the book with an informed call for institutional reforms that would lessen the negative consequences of these potentially dangerous forms of work. Anyone concerned with US working conditions – whether American workers, worker advocates, labor market scholars, or policy-makers – must read this book .— Janet C. Gornick, Professor of Political Science and Sociology, Graduate Center, City University of New York, Director, LIS: Cross-National Data Center in Luxembourg

Praise for Expand Social Security Now

“Read this book before you vote. Few issues are more important to your personal economic future. Steven Hill shows what’s at stake, and he offers solutions that Americans of all stripes can agree on.”—Robert B. Reich, author of “Saving Capitalism: For the Many, Not the Few”

“Steven Hill has written a barn burner of a book. Or perhaps I should say ‘myth buster,’ because he systematically demolishes the false justifications for slashing Social Security. In place of misplaced animus and misleading arguments, he offers a strong case for dramatically expanding America’s most successful domestic program in an age of rising inequality and widespread financial insecurity.”—Jacob S. Hacker, coauthor of “American Amnesia: How the War on Government Led Us to Forget What Made America Prosper”, Professor, Yale University

“Steven Hill has written a vigorous defense of Social Security, the country’s most important social program. While most political debate in recent years has focused on ways to cut Social Security or privatize it, Hill goes in the opposite direction and argues for a robust expansion. Hill proposes a Social Security program that would be adequate by itself to support a middle-class retirement.”—Dean Baker, co-founder of the Center for Economic and Policy Research, and author of “Getting Back to Full Employment: A Better Bargain for Working People”

“Steven Hill has produced a dynamite handbook for angry Americans who seek to take back democracy. The true contest is not Republicans versus Democrats. It is the American people versus Washington. And this is the sleeper issue the people can win. The governing elites in both parties are trying to eviscerate Social Security—arguably the most successful and most popular program created by the federal government. Hill explains why the political insiders and their Wall Street patrons are wrong about Social Security. He shows us how to mobilize to defeat the power elites and expand Social Security rather than destroy it.”—William Greider, author of “Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country”

Praise for Europe’s Promise

Financial Times: “Steven Hill is a lucid and engaging writer. He makes you sit up and think.”

The Economist: “In a new book, Steven Hill extols the European social contract for better government services. Life in Europe is more secure, he argues, and therefore more agreeable.”

Hendrik Hertzberg, The New Yorker: “Like a reverse Alexis de Tocqueville, Steven Hill dauntlessly explores a society largely unknown to his compatriots back home.”

Andrew Moravcsik, Foreign Affairs: “Europe’s Promise is a timely and provocative book . . . the “social capitalist” policies of European countries represent best practices in handling most of the challenges modern democracies face today.”